Ministers should consider boosting coffers by slapping VAT on goods like books, children's clothes and a range of food, according to recommendations by the International Monetary Fund.

A report on the British economy has called for the Government to reduce the number of products that are exempt from the sales tax.

Although the IMF did not specify which good ought to be reviewed, it says that 'zero-rated' items represent 2.5 per cent of gross domestic product and bringing more products into VAT could help repair public finances.

Good to tax? The International Monetary Fund suggested that taxing book sales could help boost public finances.

As well as books and clothes, things like bingo, water supply and charity shop sales should also fall under the scope of any review, though the IMF concedes that taxing many of these items would be politically unpalatable.

A source at the IMF said it would be possible to reduce these exemptions either by moving them to full VAT of 20 per cent, or to a reduced level.

Figures from the ONS said that in 2011/12, the average household forked out around £6,900-a-year in indirect taxes such as VAT, as well as fuel and alcohol duty.

And the prospect of introducing new items to VAT raises the ugly spectre of the 'pasty tax' debacle in 2012, when the Government's move to levy VAT on all hot food proved deeply unpopular.

It had to revise its proposals so that tax would exempt food, like pasties, which is cooked hot but left to cool in cabinets before being served.

Controversy: The Government's attempts to levy VAT on hot food in 2012 was dubbed the 'pasty tax'.

Plans to charge full VAT on static caravans were also watered down with the tax being levied instead at a reduced rate of 5 per cent.

The report also suggested the Government should more widely use means testing for social benefits and increase its use of pollution taxes such as levies on carbon and congestion, as it seeks to bring down its debt pile.

IMF managing director Christine Lagarde gave her blessing to how the Coalition was presently balancing revenue raising and spending cuts to achieve this, saying: 'We consider that the current mix is sensible.'